Stocks & Commodities V. 26:4 (52-55): Interview: Paul Hickey & Justin Walters of Bespoke by Jayanthi Gopalakrishnan

Interview: Paul Hickey & Justin Walters of Bespoke by Jayanthi Gopalakrishnan

It’s a classic situation: Young bucks learn all they can from the seasoned veteran, and once they have, it’s time for them to move on, to put their own stamp on the horizon. It’s been true all throughout time, and in this case, it’s Wall Street instead of the Wild West. Paul Hickey and Justin Walters spent time at Birinyi Associates learning and absorbing all they could from technician Laszlo Birinyi before going out on their own, setting up Bespoke Investment Group in May 2007.

Paul Hickey’s professional experience in finance runs the spectrum of equities, fixed income, and structured products. He served over six years as a research analyst for Birinyi, during which time he conceived and implemented in-depth and original research projects on domestic and global financial markets for institutional clients. His reports and findings have been extensively featured in publications including The Wall Street Journal, The New York Times, The Financial Times, Barron’s, and USA Today. Hickey frequently appears on CNBC and Bloomberg TV.

Justin Walters was a research analyst and trader at Birinyi Associates, and during his four-year tenure there, he developed numerous equity trading strategies based on proprietary fundamental and technical models that he created. His work on the underlying intraday and long-term price moves of equities and indexes has been featured in multiple publications and articles, and he has made appearances on CNBC and Bloomberg TV. Prior to his departure from Birinyi, he also headed the firm´s subscription level research product.

STOCKS & COMMODITIES Editor Jayanthi Gopalakrishnan interviewed them via email on February 11, 2008.

Paul and Justin, tell me about your backgrounds.

Paul Hickey: I knew I kets since I was eight and my school went on a class trip to the New York Stock Exchange. The energy was addictive, and from then on I was into stocks. After graduating from college, I was hired in spring 1997 by Smith Barney for their emerging market structured products group. I started at Birinyi Associates in summer 2000 where I worked in equity research through April 2007. In May 2007, Justin and I left to form Bespoke Investment Group.

Justin Walters: I’ve been interested in the markets since I was very young, too. My father has been an advisor for Morgan Stanley for close to 30 years, and one of the first birthday gifts I can remember receiving from him was a stock certificate for 10 shares of Boston Celtics Limited Partnership. Collecting and trading baseball cards when I was six or seven was the start of my investment career. I tried to be the “boy plunger” of my block as far as card collecting went. Since then I’ve been into trading and dealmaking.

What led to your decision to start Bespoke?

Working at Birinyi Associates was an invaluable experience. We both learned more about the markets there than we could have possibly learned anywhere else. One of the beauties about working there was that we didn’t just learn from Laszlo [Birinyi], he encouraged us and gave us latitude to pursue and develop our own interests. We decided to make the transition and start our own firm because we’ve both always had entrepreneurial spirits. One of the great things about working in the financial markets is wanted to work in the marthat you always know exactly where you stand. It’s similar when you are running your own business.

I’m sure you learned a lot at Birinyi. What did you learn there to help you become good traders?

One theme we’ve kept with us from our time there is to always question the source of any research or advice, and ask as many questions as possible about the agenda or bias of the writer. Currently, Wall Street strategists are relatively bullish in their outlooks, but they are always bullish. The job of the firms that sign their paychecks is to sell stocks. Similarly, the rating agencies are under a lot of scrutiny because they still have AAA ratings on the monoline insurers, but anybody who’s paid attention knows about the inherent conflicts of interest with the current system. The ratings agencies are paid by the companies they cover.